FBI Director Robert Mueller and Deputy Attorney General Mark Filip announced the arrests the same day two former Bear Stearns hedge fund managers, Ralph Cioffi and Matthew Tannin, surrendered to the FBI. The men are expected to face federal charges that they intentionally misled investors in two funds that collapsed last summer under the weight of wrong-way bets on mortgage-backed securities.
More than 400 people have been charged in the mortgage fraud probe, of whom nearly 300 have been arrested, including 60 in a coordinated sweep Wednesday, the Justice Department said.
The losses in the mortgage fraud cases cost consumers more than $1 billion, Mueller said."Operation Malicious Mortgage," the investigation by the FBI and Justice Department, began March 1, government officials said. It resulted in 144 fraud cases in which 406 defendants were charged.
The FBI is investigating about 1,400 more cases of potential fraud, Mueller said, calling it "a substantial number of investigations, unfortunately."The agency has 42 mortgage fraud task forces in operation, employing 180 agents, Mueller said.
Officials indicated the suspects were involved mostly in small-scale schemes.
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